How raising visibility aligns with raising capital: What private equity firms need to tell their story
Monday, May 15, 2017 — By Mostafa Razzak
While the private equity market remains robust, it’s no longer a given that firms will make the kind of money they did just a few years back. In the fourth quarter of 2012, U.S. private equity activity hit a lofty high—with 1,070 deals closed to the tune of $190 billion, according to PitchBook. Fast forward to mid-2016, though, and it’s slower going. The 719 second-quarter deals, worth $135 billion, marked a one-third drop in volume.
Yet in the quest to survive and thrive, the value of media attention often goes overlooked. That’s understandable, given that the phrases “private equity” and “public relations” imply diametrically opposite spheres. Since public listing or trading never enters the picture, does it really make sense for private equity firms to seek attention?
The answer, it turns out, is more than just “yes.” For viewed through the paradigm of the smart dealmaker, the return on investment private equity firms can realize simply by enlisting pinpoint PR may just add up to the deal of the year.
To be sure, private equity firms have sound reasons for operating under the radar. In the wake of the Wells Fargo scandal, companies that get into spotlight might find the light glaring, as issues of compliance, regulation and privacy can come into play. Private equity is also the domain of the accredited investor, a wealthy breed apart due to their $1 million-plus net worth.
But as any investment expert will tell you, deals don’t come knocking at the door every day—and the most persuasive sales pitch is the one that’s based on showing as opposed to telling. It’s one thing, for example, to say you have a team of experts in your firm. But it’s quite another matter when you can get yourself out there as thought leader, offering insightful analysis and informed opinion through a major media outlet. You can call yourself a deal-making expert. But isn’t it far more powerful when a top-tier institution gives you that credibility, along with their rock-solid platform?
Simply put: Raising visibility raises money. Just as a sound deal in private equity revolves around investor value, there is a value proposition behind savvy PR that feeds your overarching business goals. (image below - sourced from Legal Morning).
Seasoned PR professionals practice many variations on the theme of highlighting success. They can point out the accomplishments of portfolio companies, update the marketplace on successful exits, and reinforce a positive perception of just how far you go to support business. Getting that kind of exposure is far from a given; it’s tougher than ever in a digital age to rise above the noise floor and get noticed. Nor is the competition standing still. It’s far better to say something and create awareness now than play catch-up later.
But your rivals won’t be the only ones listening when your expertise gets broadcast far and wide. So will the leaders of companies looking for private equity strategic partners. This is how relationships are built, and every success in private equity can be traced to the power of relationships.
That power also represents one of the strongest advantages a PR pro can offer. For public relations, as practiced by the best, is also about public relationships. Whether dealing with editors on a first-name basis, speaking the inside language of the journalist, or banking on long-standing bonds to create opportunities that wouldn’t exist otherwise, those at the PR pinnacle know and practice the fine points of leveraging strong relationships.
There’s also the notion of story—something knit into everyone from a very young age. A great sales pitch may still fail to stop most people dead in their tracks. For all its verbal gymnastics, it can even sound insincere. But a great story always succeeds: It attracts where other messages repel.
What is your story? Who’s telling it? Someone needs to do it—otherwise, what separates your private equity firm from any of your competitors? You can try to tell the story yourself and hope that busy media gatekeepers will take just a second to listen. You can keep your story under wraps and hope that market tailwinds continue indefinitely.
Or, you can entrust the challenging task of gaining peerless, positive exposure to a true expert. Tell us your story—and let us help you take it to a whole new level of power and profitability.